TITAN INDUSTRIES LIMITED

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TITAN INDUSTRIES LIMITED

• 5th August 2009
• Delivering value by creating desirable brands

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Disclaimer
Certain statements are included in this release
which contain words or phrases such as will,
aim, will likely result, believe, expect,
will continue, anticipate, estimate,
intend, plan, contemplate, seek to,
future, objective, goal, project,
should, will pursue and similar expressions
or variations of these expressions that are
forward-looking statements. Actual results may
differ materially from those suggested by the
forward-looking statements due to certain risks
or uncertainties associated with our expectations
with respect to, but not limited to, our ability
to implement our strategy successfully, the
market acceptance of and demand for our products,
our growth and expansion, the adequacy of our
allowance for credit to franchisees, dealers and
distributors, technological changes, volatility
in income, cash flow projections and our exposure
to market and operational risks. By their nature,
certain of the market risk disclosures are only
estimates and could be materially different from
what may actually occur in the future. As a
result, actual future gains, losses or impact on
net income could materially differ from those
that have been estimated.   In addition, other
factors that could cause actual results to differ
materially from those estimated by the
forward-looking statements contained in this
document include, but are not limited to general
economic and political conditions in India and
the other countries which have an impact on our
business activities inflation, unanticipated
turbulence in interest rates, foreign exchange
rates, the prices of raw material including gold
and diamonds, or other rates or prices changes
in Indian and foreign laws and regulations,
including tax and accounting regulations and
changes in competition and the pricing
environment in India. The Company may, from time
to time make additional written and oral
forward-looking statements, including statements
contained in the Companys filings with SEBI and
the Stock Exchanges and our reports to
shareholders. The Company does not undertake to
update any forward-looking statements that may be
made from time to time by or on behalf of the
Company, to reflect events or circumstances after
the date thereof.
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Titan Industries The surging spirit of India !
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Titan Industries

• Pioneer
• Breaker of rules
• Leader in two businessespremium and mass market
• Manufacturer, designer, brand owner, marketer,
  retailer and after-sales service provider
• Unique culture
• First company to dare to challenge the Swiss
• B2C and B2B player
• In four businesses from 2007-08
• One of the Jewels of the Tata Group

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Our Heritage the TATA Group

• Titan is a part of the TATA Group having a
  turnover of about
• USD 30 bn, equivalent to over 2.5 of Indias
  GDP and having the biggest market capitalization
  in India
• The Tata group is Indias largest employer in the
  private sector 222,000 employees across 85
  companies
• The TATA group has achieved many Firsts for
  India
• First private sector Steel mill
• First private sector Power utility
• First luxury hotel (Taj)
• First Airline (now Air India)
• The Worlds least expensive car (Tata Nano)
• Indias largest software company (TCS)
• Indias largest watch jewellery mfgr (Titan)

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About Us

• Titan is the worlds fifth largest, integrated
  manufacturer-brand for watches
• Commencing production in 1986-87, the Company is
  today the leader in the Watch Jewellery
  businesses in India
• First largest player in the branded jewellery
  segment (Tanishq)
• gt60 share of the organised watch market
• Over 90 million watches sold across 30 countries,
  cumulatively
• Manufacturing Facilities
• Main Watch Jewellery plants in Hosur near
  Bangalore (Indias Silicon Plateau)
• Watch assembly plants at Dehradun, Baddi, and
  Roorkee. ECB plant in Goa Jewellery-making
  facility at Dehradun
• Investment of US150 million in 450,000 sq.ft.
  state-of-the-art manufacturing facilities
• Owned by Tata 25.17 and TIDCO 27.88
• Professionally managed by TATA group an
  independent Board

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Recognition and Awards in many categories

• Indias most admired consumer durables company
  having the most trusted brand in India -TITAN.
• Both TITAN and TANISHQ adjudged best retail
  brands in IFF survey
• JRD QV (Malcolm Baldrige) Award in 2006 to the
  Watch Division followed by Industry Leader Award
  in 2009. Jewellery Divn received Emerging
  Industry Leader Award also in 2009.
• ET and Great place to work survey selects Titan
  as best employer in Retail and among the top 25
  nationally
• President of India Award for best employer of the
  physically challenged.

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Our businesses
Currently Marketing our Products in 26
countries with a larger footprint in the Middle
East and Asia-Pacific regions
Watches
Jewellery
Eyewear
Precision Engineering
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Our Brands
TITAN
SONATA
FASTRACK
XYLYS
TANISHQ
GOLD PLUS
TITAN EYE
ZOOP!
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Our businesses
2,662
B2C businesses Products
B2C businesses Retail
Premium
2 stores 6,700 sq ft
1 store 2,700 sq ft
Mid-premium
273 stores 2,50,000 sq ft
77 stores 68,000 sq ft
115 stores 2,25,000 sq ft
Fastrack accessories
7 stores,3500 sq ft
Mass
30 stores 48,000 sq ft
Watches
Jewellery
Others
Watches
Jewellery
Others
B2B businesses PED and MBA
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Seize the Opportunity !
Organised Retailing The New Buzz

• Our retail network, now comprising of
• 115 Tanishq stores
• 273 World of Titan stores
• 30 Goldplus stores
• 2 Zoya stores
• 1 Helios store
• 4 Fastrack Kiosks
• 7 Fastrack stores
• 10 Sonata stores
• 77 Titan Eye stores
• ...accounts for Rs 3000 crs of annual sales
  making us Indias largest speciality retailer

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2008-09 Summarised Results
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2008-09 continued growth despite the slowdown

• Financials
• Company Income crossed Rs 3750 Crores (US 750
  million)
• PBT crossed Rs 230 Crores (US 46 million)
• Brands
• Brand Tanishq crossed Rs 2370 Crores (US 475
  million)
• Brand GoldPlus crossed Rs 390 Crores (US 78
  million)
• Brand Fastrack crossed 1.50 million watches
• Retailing
• World of Titan stores crossed 250
• Tanishq and GoldPlus outlets touched 150
• New Business
• Titan Eye outlets reached 70 (from 10)

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THE THREE YEAR JOURNEYINCOME
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4
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THE THREE YEAR JOURNEYCAPITAL EMPLOYED
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THE THREE YEAR JOURNEY COMPANY PROFITABILITY
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Market Capitalisation (Rs. Crores)
Crossed US 1 Billion
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2009-10 PERFORMANCEFIRST QUARTER
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2009-10 Q1

• Watch revenues and results were positively
  impacted by the improved product mix from higher
  sales of Fastrack and Titan watches (due to
  wedding season) and the successful re-launch of
  Sonata after completion of the planned
  down-stocking in Q4.
• Jewellery sales were impacted by the high Gold
  prices.
• Sales increased by 3 in value terms, but
  with a Gold price increase of almost 20 the
  volume de-growth of Q4 continued in Q1. Results
  were also impacted by the adoption of AS 30 and
  inventory valuation by FIFO.
• The Eyewear chain grew from 69 to 77 outlets and
  the Company continues to invest in this business
  which will continue to grow and break even only
  by 2012.
• Precision Engineering made a small loss due to
  deferral of deliveries at the request of several
  customers. It is expected to break even once
  again, by Q2.

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PERFORMANCE 2009-10 FIRST QUARTERINCOME
9
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3
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PERFORMANCE 2009-10 FIRST QUARTER
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70
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PERFORMANCE 2009-10 FIRST QUARTERCAPITAL
EMPLOYED (END JUNE)
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CHANGE IN METHOD OF INVENTORY VALUATION FOR GOLD
India will be adopting International Financial
Reporting Standards (IFRS) from 1 April 2011.
Essentially, this involves the adoption of
several new (and different) accounting standards.
One way of doing this is to wait until April 2011
and change over in one shot. However, the more
prudent course is to progressively adopt these
standards over the two-year period available to
us. One of the new standards is AS 30 which
covers hedge and derivative accounting. Our gold
stocks are completely hedged and this standard is
therefore applicable to us and we decided to
adopt it from 1 April 2009. Our inventory of
gold (including finished jewellery) was earlier
valued on a "Weighted Average Cost" system.
However, when one adopts hedge accounting, this
method of inventory valuation gives a slight
distortion to the operating results. FIFO gives a
much lower distortion (in theory, no distortion
at all) and Titan Industries Ltd has therefore
simultaneously adopted FIFO. For the quarter,
the change in stock valuation is about Rs 30
crores which has been accounted under Decrease /
Increase in stock-in-trade. An illustrative
comparison of the two methods follows.
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EXAMPLE - COMPARISON OF FIFO WAM

• Under FIFO method- No profit or loss
• Under Weighted average method- Loss of Rs. 1333
  which will be recouped when the closing stock is
  sold in the next period

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I Watch Business
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The Watch Market Industry in India

• India is an under-penetrated market for watches
  only 27 of Indians own a watch
• Total estimated market in 2008-09 Volume 43.5
  mn units Value Rs 3000 Crores (USD 600 Mn)
• Vast proportion of the Indian market is below Rs
  500 68 (85 by volume)
• Market has been split into Low end, Mass market,
  Premium,Luxury

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Watch Market Map
Formal / Classic
Omega,Rado, Longines
Raymond Weil Tissot
Nebula
TITAN Citizen Timex
Sonata, HMT, Maxima
XYLYS
Price
1000
2000
4000
5000
10000
Rs 500
30,000
Espirit, Swatch Fossil Giordano, DKNY,
Carrera Tommy Hilfiger
Fastrack
Tag Heuer Hugo Boss C Dior
Fashion/Sporty
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OUR WATCH BUSINESS OVERVIEW

• Significant growth over the past three years
• Rs. 800 Crores Sales excluding exports and
  after-sales
• service (over Rs 1200 crores at retail prices)

Revenues

• Consistent growth
• PBT (2005/06) - Rs. 90 Crores
• PBT (2006/07) - Rs. 96 Crores
• PBT (2007/08) - Rs. 133 Crores
• PBT (2008/09) - Rs. 127 Crores

Profits

• ROCE (2005/06) - 50
• ROCE (2006/07) - 50
• ROCE (2007/08) - 62
• ROCE (2008/09) - 52

ROCE
ROCE
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INTERNATIONAL BUSINESS

• One of Indias first companies to market a
  consumer brand overseas.
• Now present in 26 countries outside India
• Among the top 3 brands in some Asian countries
• Selling over 675k watches annually with
  increasing presence in jewellery.
• Total export sales of over Rs 130 crores in
  2008-09

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II Jewellery Business
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Jewellery Market Industry highlights

• Size of market Rs 80,000 crores ( US 16
  billion)
• Urban market is about 38 of this base
• Branded jewellery is less than 10 of the overall
  market
• Importance of jewellery to Indian consumers
• Gold is seen as auspicious, an investment, for
  adornment.
• Product mix largely plain gold 22kt, with gem
  set
• jewellery constituting less than 10 of the
  market

Market

• Key players Fragmented market, mainly retailer
  driven.
• Most retailers are unorganised and stand alone
• Absence of hallmarking
• Tanishq - the first branded jewellery player
  (1996)
• Increased investment by industry bodies (DTC,
  PGI, WGC) is spurring rapid growth of the branded
  jewellery market in India

Players
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TANISHQ TODAY A BRIEF OVERVIEW

• Strongest and most aspirational brand in the
  jewellery category
• Awarded most admired brand and Retailer of the
  year by
• Images Fashion
• Enjoys a market share of over 40 in branded
  jewellery

Brand

• Indias only national jewellery retailer
• 115 stores in 70 towns prime high street
  locations
• Many of these stores are run by franchisees

Network
Customer Base

• Over 1.5 million customers shopped at Tanishq
  last year

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Gold Plus Size of the opportunity

• Semi-urban and rural market estimated to be as
  much as 40 of the total Over Rs 30,000 crs.
• Value conscious consumers, buying traditional
  jewellery
• Very fragmented industry with under-karatage
  still prevalent in many parts of the country
• A new business model and a new brand to exploit
  this opportunity
• Sales of Rs 95 crs in 2006-07,Rs 200 crs in
  2007-08 and Rs 390 crs in 2008-09
• 30 outlets as at 31 March 2009

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OUR JEWELLERY BUSINESS - OVERVIEW

• Rapid growth of 40 p.a. over the past three
  years
• Rs. 2350 crores during the latest financial year
• 60 of the Companys revenues

Revenues

• Impressive turnaround in domestic market
• PBT (2005/06) - Rs. 35 crores
• PBT (2006/07) - Rs. 77 crores
• PBT (2007/08) - Rs. 101 crores
• PBT (2008/09) - Rs. 194 crores

Profits

• ROCE (2005/06) - 34
• ROCE (2006/07) - 61
• ROCE (2007/08) - 60
• ROCE (2008/09) - 84

ROCE
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IV Precision Engineering Business
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Precision Engineering Business

• Rationale
• Leveraging Engineering capabilities
• B2B business balances risk of B2C businesses
• The Opportunity
• India growing as a manufacturing base for
  precision products across industries
• Cost pressures and offset requirements guarantee
  a long term opportunity
• High cost of switching for customers
• Large growing market The global market for
  precision engineering products addressable by
  Titan is Rs.135,000 cr.

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Current position 3 segments 3 streams
Automotive
Automation Solutions

• Precision
• components
• Dash board
• instruments
• Sub systems

Market Size Rs 135,000 Cr.
Market Size Rs 575 Cr.
Aerospace
Medical
Domestic Market Only
Domestic International Market.
TSMG Study
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Wiper Motor Assembly Lucas TVS

• Value Rs.289 lakhs
• Complete assembly Testing of wiper motors 23
  models
• 21 Stations
• 14 stations with universal fixtures

• 13.5 Seconds cycle time
• Lean design of stations
• Performance Testing, Noise Testing

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Recent Products
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Precision Engineering Business

• The Customers
• Eaton, US Bosch, India
• Hamilton Sunstrand, US Lucas, India
• Microtechnica, Italy Tata Motors, India
• Schlumberger, US Timken, India
• Ford, UK Turbo Energy, India
• Visteon, US / India Stanadyne, India
• Tyco Electronics, India
• The Achievement
• Achieved a turnover of Rs 76 crores in 2008-09
• (up from Rs 56 crores in 2007-08)
• Achieved break-even for the year
• Targeting a turnover of Rs 83 crores in 2009-10

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THE EYE WEAR BUSINESS

• Started in 2004-05 by marketing Sunglasses under
  the Fastrack brand
• Targeted the youth segment
• Pilot project for Prescription Eyewear started in
  March 2007
• Achieved a sales turnover of over Rs 66 crores in
  2008-09 up from Rs 40 crores in 2007-08
• 70 Titan Eye outlets as on 31 March 2009

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THE EYEWEAR MARKET AN UNTAPPED OPPORTUNITY
Incidence 30 of population typically needs
correction in vision 300 mn Users 84mn users
which is about 25 of those who need the
correction Consumers change their glasses /
frames once in 3 to 4 years on an average

• Market size
• 25-35 million units per annum
• Rs 1500-1800 crs per annum
• Repeat purchase is a regular feature from
  adolescence to old age.
• Customer lifetime value is very high
• Almost everyone over 40 yrs needs correction.

• Growth Market has been growing in double digits
  15-20 per annum and likely to sustain
• Demand drivers Urbanization, literacy,
  Penetration of TV computers, Poor eye health
  due to lifestyles/ improper diet, etc.
• Margins Overall mark ups of up to 300 exist
  between landed cost retail price!

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OUR BUSINESS PROPOSITION

• Product / Service Offering
• Eye checking, Optometry
• Range of frames - Titan licensed brands
• Range of Branded Lenses
• Sunglasses Titan, Fastrack licensed brands
• Contact Lenses, Accessories

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WHERE WILL WE PLAY IN THE VALUE CHAIN
O U T S O U R C E

• Frame and lens manu-facturing

Tie up with reputed lens brands own labs
Lens mfg. being evaluated
Focus on strengths and high margin areas
DESIGN, RETAIL, SERVICE MARKETING
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Way Forward
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2009-10

• Turnover to grow by about 20 over previous year
  (at constant gold prices), to target Rs 4,600
  crores
• Operating Profit to grow in similar fashion
• Continued retail network expansion

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The Five Year Story.Multiple Businesses, Brands
Geographies
Watches Jewellery
TITAN SONATA TANISHQ
200 STORES IN INDIA AND PRESENCE IN 17 COUNTRIES
2 DIVISIONS 3 PLANTS WITH 2500 PEOPLE
PRODUCTS
BRANDS
GEOGRAPHIES
UNITS
Watches Jewellery Sunglasses Eyewear Precision
parts
TITAN SONATA FASTRACK XYLYS TANISHQ GOLD
PLUS TITAN EYE
500 STORES IN INDIA AND PRESENCE IN 26 COUNTRIES
10 SBUs 9 PLANTS WITH 4500 PEOPLE
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Further information is available on
www.titanworld.com
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THANK YOU